Hourly Pay for Exempt performing Nonexempt work??

Read through the threads and also looked to the Code on this, but cannot find a clear answer. We have an exempt employee who works in the "office" and wants to work parttime hours out in manufacturing to earn some extra money. I realize the employee cannot work more than 20% of normal hours worked in a given work week, but my question is how to pay the employee? On one of the other threads, forumites responded that no extra pay was due for nonexempt work taken on by an exempt employee. Another thread involved an exempt employee who wanted to perform outside jobs for the employer and was to be paid on a per job basis. But my situation here is the exempt works his duties 9-5 M-F and wants to work hours in mfg on Sat and Sun for extra money. Do we pay the employee the hourly rate for the job that would be worked on Sat and Sun?

Comments

  • 6 Comments sorted by Votes Date Added
  • This may be advice you do not want to hear, but this type of arrangement really bolloxes up the works. If you begin allowing this for one, others will want in on it and before you know it, you are paying time-and-a-half for lots of "extra work" that everyone wants to do. Yes, it is a nice thing for EEs, it becomes a nightmare for ERs. Just my opinion.
  • [font size="1" color="#FF0000"]LAST EDITED ON 11-23-04 AT 02:49PM (CST)[/font][br][br]Marc,

    Are you saying that the hours worked in the non-exempt position now become OT since you state "paying time and a half for the extra work". Obviously, what I was hoping for was support to view the two positions as separate and distinct from one another. Employee has exempt job and works his normal workweek. He takes on a part-time hourly wage job (that just happens to be at his same employer). The part-time job has its own set of parameters, wage rate, duties and responsibilities.

    Like I said in the original post, I just cannot seem to find anything that says how to approach the second job in terms of paying wages. I do not believe it would be considered OT on the argument presented above, but cannot find anything to support or discredit it.

    I appreciate your comments and if you can direct me somewhere to search for the ever elusive answer, it would be most welcome.

    Thx.

    Heidi
  • Heidi I'm not an expert by any stretch, but I will say IMOH you are about to tread where you do not want to tread. I'm in agreement with Marc that there would be definite OT implications in your scenario. If you would not pay OT, all it would take would be for this EE to become upset and complain to the DOL and you would have a whole bunch of "splaining" to do, not to mention the back pay and fines and penalties you might be assessed.
  • Thanks to you both for your comments. All info indicates this is not an avenue we wish to tread down.

    Happy Tranksgiving to all and be safe!
  • A little late to the discussion, but I also believe it would be o/t, and, I think you would have to calculate the 'regular' rate (sal + hourly earned / total hours ) then pay half time of that figure for the hours over 40. You would need to do this every week because if the total hours worked varied, sowould the regular rate and therefore the o/t rate.
  • I just thought I would come back to the forum with the information provided me on this matter.

    There are two issues that must be addressed when considering the exempt individual who desires to take on part-time non-exempt work duties: (1) Is the employee's exempt status in jeopardy when he takes on non-exempt work duties? and 2) How to pay the exempt employee for hourly non-exempt work?

    Maintaining Exempt Status -- To maintain the exempt status while performing non-exempt work, the company must perform an analysis of the exempt position to determine the following: (1) under what classification is the exemption claimed; (2) combine both the exempt and non-exempt work together, then determine the percentage of duties to be exempt and those to be nonexempt in the given work week. For example, exempt employee generally works a 40-hour work week and wants to take on 20 hours in mfg operations (non-exempt). Employee works a total of 60 hours in a given work week. It is determined 25 hours (41 percent) is spent in non-exempt duty with the remaining 35 hours (or 59 percent) in exempt work. According to the DDOL, the exempt employee status would "probably be okay." However, were the percentages to be closer together, 50/50, then the employee would be in jeopardy of losing his/her exempt status.

    Wage Arrangement for Non-exempt Work --
    1. The company may pay whatever it wants to the employee for performing the manufacturing work, so long as the employee continues to receive the guaranteed salary for his regular exempt position.
    2. No overtime premium need be paid so long as the employee retains exempt status.

    Finally, and most importantly, this is a gray area at best. The regulations do not clearly address a situation such as this, and the DDOL did not seem clear regarding the classification of the employee. Court cases in the past (under the former regs) had mixed results.

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